Monday, March 28, 2016

Forward thinking

ABU
DHABI --- While oil-exporting countries face significant challenges as result
of global economic turbulences and falling oil prices, the UAE continues to
achieve new levels of economic growth.

This comes as a direct result of the
UAE wise leadership’s forward-looking vision and its precise predictions of the
region’s developments-which contribute in facing growing global economic
challenges, through developing and putting in place prudent financial policies
and sound economic methodology that promotes sustainable economic growth.

This economic growth did not come as a
surprise to experts and analysts. The economic diversification policies adopted
by the UAE in the early eighties, laid down by the late Sheikh Zayed bin Sultan
Al Nahyan and guided by President His Highness Sheikh Khalifa bin Zayed Al
Nahyan, play an essential role in strengthening income sources and building a
national, knowledge-based economy founded on a spirit of creativity and
innovation with deep knowledge on global economic challenges.

The International Monetary Fund praised
the vision of the UAE wise leadership and the fiscal policies adopted by the
Ministry of Finance.

H.H. Sheikh Hamdan bin Rashid Al
Maktoum, Deputy Ruler of Dubai and UAE Minister of Finance, stressed the
country’s relentless pursuit of development and prosperity for its people and
residents. "The diversified financial and economic policies put in place
displayed the country’s high ability to cope with the oil exports challenges,
debt issue coverage on an external and local level at good cost, as a result of
adopting proactive steps in market liberalization and deregulation, thereby
opening up the banking sector to domestic and foreign financial institutions.
In fact, this raised the efficiency of the financial system and rates of
domestic reserves, and has contributed to the growth of capital markets and the
continuous investment for major infrastructure projects."

Sheikh Hamdan bin Rashid said,
"The UAE continues to gradually restructure its financial system through
enhancing financial reserves and developing policies to maintain financial and
monetary stability and push sustainable economic growth, as well as policy
reforms in removing oil dependency and laying foundations in implementing VAT. The
UAE has an important status as active player in economic diversification.
Despite being the sixth largest oil exporter, the revenues of this sector
amounts to 30 percent of the total financial resources of the country; where
the economic and financial indicators confirm unprecedented growth in other
sectors".

Sheikh Hamdan bin Rashid added,
"The decline in oil prices is part of the global economic cycle. The
oil-producing countries faced similar cases in the mid-eighties, which the UAE
overcame thanks to its lead in setting the right methodology, managing
resources and controlling costs. This phase is a continuous part of the
economic cycle which I trust the country will overcome due to its proper
planning, spending restraints frameworks, financial adaptation and creating
sustainable government revenues by depending on alternative oil
resources".

The UAE’s leading sustainable journey
received great interest and appreciation on different regional and
international levels.

During her visit to the UAE in February,
Christine Lagarde, Managing Director of the International Monetary Fund (IMF),
highlighted the wise fiscal policies adopted by the country; that enhanced its
competitiveness and made bank assets, owned by the local banking sectors, the
largest of its kind in the region making the UAE the second largest economy in
the region and 17th globally according to the World Economic Forum (WEF)
indicators.

Christine Lagarde highlighted the
leading role of the UAE’s wise leadership in managing the process of growth and
development. The goal is for the UAE to become one the most competitive
economies in the world by 2021 with the implementation of diverse economic
policies and by encouraging the growth of the industrial and non-oil sectors as
alternatives to oil. The efforts exerted by different governments resulted in
the UAE’s non-oil exports exceeding the aggregate of other GCC countries.

"Our discussions with the Ministry
of Finance and UAE government entities touched on a profound awareness to
economic challenges and the continuous pursuit to adopt and implement gradual
fiscal consolidation through raising non-oil revenues, phasing out other energy
subsidies, implementing the tax system next year and providing foreign
investment data to strengthen financial stability, and improve statistics and
transparency, notably the collection and publication of data on the
International Investment Position, and to implement further structural reforms
to foster productivity and competitiveness in international forums," Christine
Lagarde was quoted by a press release from the Ministry of Finance as saying.

Dr. Hazem Al Beblawi, Member of the
Executive Board of the IMF, praised the comprehensive development methodology
adopted by UAE in local economic diversification to be one of the top countries
in the region.

Al Beblawi said, "The decrease in
oil revenues paved the way to implement VAT on a regional level, and UAE had
qualitative steps in this field. Aside from implementing economic
diversification policies, decreasing oil dependency and strengthening and
supporting innovative projects, the Ministry announced the beginning of VAT
implementation in the coming years; to be, as witnessed, a pioneer in
implementing and adopting fiscal and monetary reforms in the regional and international
level".

Obaid Humaid Al Tayer, UAE Minister of
State for Financial Affairs, said, "The decline in oil prices is
considered a great opportunity to restructure the economy and stimulate more
economic diversification factors, encourage production and industrial sectors
to enhance its contribution in the GDP of the UAE. MoF is implementing a
long-term strategy with clear objectives to develop a suitable environment for
expanding the productive base and industrial sector, enhancing reliance on
non-oil sectors, boosting investment in infrastructure and supporting foreign
trade. This will in turn support economic integration and the growth of the
UAE’s economy".

Younis Haji Al Khoori, Undersecretary
of MoF, said, "The Ministry established a solid platform that is based on
specific standards and policies in the management of government financial work,
which enabled it to study macroeconomics and develop effective financial
forecasting to improve quality standards and fiscal policies. The Ministry has
a task of providing and managing financial resources for the Federal budget
without deficits. The Ministry also continues to support innovative projects in
different fields and to implement best international standards in managing
government financial resources; in order to achieve local economic stability
and sustainability".

Khalid Ali Al Bustani, Assistant
Undersecretary for International Financial Relations at MoF, said, "The
Ministry seeks to strengthen the UAE’s international network with different
countries and regional and international financial entities with whom we share
goals and visions for discussing best ways to diversify income resources and
develop innovative solutions to face challenges in the next phase; in order to
control expenditures, increase revenues and develop financial and tax
reformation programs and systems aimed to enhance international financial
stability and achieve sustainable economic development".

A specialized IMF delegation conducts
annual visits to the UAE within the framework of article IV discussions. These
visits aim to evaluate financial, monetary and economic sectors. A report is
issued with essential economic developments and statistical reports on an
annual basis. The Fund’s report, issued in October 2015, highlighted UAE
ability to achieve growth twice more than the economic growth in the Euro-zone
at this time. It also underlined that the UAE is steadily moving towards the
path of growth and prosperity, leaning on fiscal and monetary stability
elements led by MoF, as well as its commitment to enhance the country’s
position in the region and the world.